The international rating agency S&P Global Ratings has upgraded the long-term credit rating of Ukrzaliznytsia and its Eurobonds from ‘CC’ to ‘CCC-.’ This decision was made after the company successfully paid the coupons on its Eurobonds in January 2024. However, despite the improvement, the risk of default remains significant due to the company’s difficult financial situation, S&P writes.
The rating upgrade was possible after Ukrzaliznytsia paid coupons on its Eurobonds maturing in 2026 and 2028. This shows that the company is still able to meet its obligations. However, S&P has kept its outlook Negative, which indicates a high level of uncertainty about the future of Ukrzaliznytsia.
The main challenges remain liquidity pressures due to the war in Ukraine and uncertainty over the government’s financial support. S&P emphasizes that without additional government intervention or significant cost cuts, Ukrzaliznytsia may face the need for debt restructuring or default within the next 6-12 months.
